Started in early 2004, this hack featured two fan characters: Red Hot Sonic and Jet Pack Tails. Several versions were released (0.50, 0.60, 0.70, 0.80, and then finally 0.90). The hack started off bad (especially the palettes) but became more developed over time.

Because it was made through the original SonED, the hack did not feature many coding changes. Instead it had palette changes, different level layouts, and some new art. It did feature a brand new object that was totally original and hasn't been featured in a hack before: the walk-through-wall monitor. When this was destroyed, the character was given the power to walk through a wall. This only appeared in Hidden Palace Zone. All the level names were changed, with some becoming quite nonsensical. For example, Hidden Palace Zone was renamed Crystalize, even though there were no crystals in that level.

Eventually, redhotsonic began to lose interest in hacking, especially due to events in his life (new job, etc.), so Red Hot Sonic 2 was never finished and development ended with version 0.90. He then announced his desire to let someone continue it if they so desired. A few volunteers expressed their interest and ultimately jman2050 was chosen. Ever since then, no more was heard about this hack, although jman did make a post concerning it and explaining the lack of updates: